03 April 2013 05:45 [Source: ICIS news]
By Prema Viswanathan
SINGAPORE (ICIS)--Prices of polyethylene terephthalate (PET) in the Middle East have plunged to a 14-week low in line with a steep decline in feedstock costs, and are unlikely to bottom out until May, market players said late on Tuesday.
The fall in Middle East PET prices to levels last seen in December 2012 echoes the declining trend in Asia, which caused competitively-priced imports of PET from China and southeast Asia to flow into the Gulf Cooperation Council (GCC) region, traders said.
“With Chinese and Malaysian cargoes available at $1,480/tonne (€1,154/tonne) CFR (cost & freight) GCC, higher-priced regional material is no longer attracting much buying interest,” said a Dubai-based PET converter.
PET prices in the Middle East declined by $40-60/tonne week on week on 28 March to $1,480-1,500/tonne CFR GCC, according to ICIS pricing data.
Prices of purified terephthalic acid (PTA) and monoethylene glycol (MEG) were $42-50/tonne lower week on week at $1,045-1,050/tonne CFR China and $978-990/tonne CFR China on 27 March respectively.
The falls in PTA futures and softer feedstock paraxylene (PX) prices have placed continued downward pressure on the prices.
A major regional supplier lowered its offers for April cargoes by $80-100/tonne from March offer levels to $1,520-1,550/tonne DEL (delivered) GCC but buyers said they were waiting for offers to be further reduced.
The tightness in regional supply caused by an ongoing month-long turnaround at SABIC’s 330,000 tonne/year PET plant at Yanbu in Saudi Arabia and the start of the peak demand season which typically lasts from April through to July failed to stem the price decline, suppliers and buyers said.
Suppliers in the region had very low inventories as March had seen considerable buying activity ahead of the peak season.
A separate GCC supplier said it was in a sold-out position for March and would have to run its plant at 110% of its installed capacity to meet fresh orders, which were likely to emerge because of the price decline.
End-users, on the other hand, were mostly well stocked. A Saudi Arabia-based end-user said it has ample stocks to cover for the next two months, but would make more purchases if it is convinced that the prices have bottomed out.
Major PET producers in the Middle East include SABIC, JBF RAK and OCTAL.
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